Federal Judge Halts Overtime Rule

Society for Human Resource Management (SHRM) reports that until a final decision is reached, employers may continue to follow the existing overtime rule.

Just 10 days before the implementation date, a federal judge in Texas put the brakes on the Department of Labor’s (DOL’s) new federal overtime rule, which would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay.

Twenty-one states filed an emergency motion for a preliminary injunction in October to halt the rule. They claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years.

FLSA Overtime Rule Compliance

For more overtime compliance news, tips and tools, check out the SHRM resources provided below:

The states’ case was consolidated last month with another lawsuit filed by the U.S. Chamber of Commerce and other business groups, which raised similar objections to the rule.

The overtime rule was scheduled to take effect Dec. 1 and would have raised the salary threshold from $23,660 to $47,476. The rule also provided for triennial adjustments based on the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region.

“A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas in a Nov. 22 ruling.

“This is a total surprise in many respects, but you have to tip your hat to the judge who made a tough call and hopefully a decision that will stay in place,” said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and a former acting administrator of the DOL’s Wage and Hour Division.

What’s Next?

For now, the overtime rule will not take effect as planned Dec. 1, but it could still be implemented later down the road. Employers may continue to follow the existing overtime regulations until a decision is reached.

[Read more: The Federal Overtime Rule Has Been Blocked. Now What?]

A preliminary injunction isn’t permanent, as it simply preserves the existing overtime rule—which was last updated in 2004—until the court has a chance to review the merits of the case objecting to the revisions to the regulation.

However, the revised regulation may face an uphill battle: The judge wouldn’t have granted the nationwide preliminary injunction unless, among other things, he thought the states showed a substantial likelihood of succeeding on their claims.

The purpose of the FLSA’s provisions under review in this case “was to exempt from overtime those engaged in executive, administrative and professional capacity duties,” Mazzant said. The salary level was purposefully set low to screen out the obviously nonexempt employees, he added.

Mazzant noted that the DOL “has admitted that it cannot create an evaluation ‘based on salary alone.’ ” However, “this significant increase to the salary level creates essentially a de facto salary-only test,” he said. “If Congress intended the salary requirement to supplant the duties test, then Congress—and not the department—should make that change.”

Robinson mentioned that the DOL will likely challenge the decision.

“We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans, the DOL said in a statement. The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.”

U.S. Department of Justice Final Interim Rule

On June 30, 2016, the United States Department of Justice published a final interim rule in the Federal Register that essentially doubled specific fines pertaining to immigration related offenses, including paperwork violations, and unlawful employment of unauthorized workers, among other practices.

I-9 Paperwork violations, (such as missing or incorrect fields and dates beyond the allotted time for completion), were raised from a range of $110-$1100, to a new range of $216-$2156. These new numbers become effective as of August 1, 2016, and the fines will be applicable to any violations that took place after November 2, 2015.

In addition to the paperwork violations, fines that relate to willful employment of an unauthorized employee will raise from a minimum of $539-$4313 for a first offense, all the way up to $6469-$21563 for any offenses beyond the second.

These new fines are based on formula relative to the Bureau of Labor Statistics’ Consumer Price Index from October, 2015 and were authorized by the Bipartisan Budget Act of 2015.

Employers of all sizes should focus on their I-9 processes in order to comply with all applicable I-9 laws, regulations and enforcement positions. While the enhancement of fines and the resulting publicity can be devastating for any size of business, these new numbers would be especially crippling for small to mid-size companies. It is important to note that companies of all size run the risk of audits and fines, as audits are often based on employee tips and/or inclusion in specific industries, such as food processing, transportation, staffing, etc.

These new fine levels, coupled with the incoming new Form I-9 should give employers plenty to think about in the coming months. All employers need to carefully review their I-9 Standard Operating Procedure (SOP) manuals for accuracy and detail. Stay tuned to this space as more information becomes available regarding the release date of the new form, as well as any challenges that may arise to the new fine levels.

New FLSA Regulations

On May 17, 2016 the Department of Labor finalized new regulations regarding the threshold salary for exempt (salaried) workers. Under current regulations, salaried workers making $455 or more per week ($23,660 per year) can be exempt from overtime rules. But beginning December 1, 2016, exempt salaried workers will have to make a minimum of $913 per week. In other words, the lowest annual salary an exempt worker can make will be $47,476. With a few limited exceptions, any employee making less than that will need to be non-exempt (hourly) and eligible for overtime pay. Employers have until December 1, 2016, to comply. Find out what these changes mean for your company by contacting Hunter Employment at 928-341-4664, ext 17 and asking for Tom.

FEBRUARY – OSHA Rules On Earphones

OSHA, the Occupational Safety and Health Administration, reports that preventable noise-related hearing loss is a work hazard affecting millions of people each year. High noise levels cause both temporary and permanent hearing loss, depending on the amount and length of exposure. Other effects of exposure to noise include stress, reduced productivity, and interference with communication and concentration, which are contributing factors in accidents and injuries. Because of this, OSHA has developed a regulation to address occupational noise exposure, including rules on earphones.

OSHA’s Occupational Noise Exposure Regulation
OSHA’s occupational noise exposure regulation standard number 1910.95 requires employers to take specific actions to ensure worker protection when there are continuous high noise levels. The regulation states that continuous high noise levels must be measured with standard sound level meters and employers must try to implement feasible controls. If those fail to reduce exposure to required levels, personal protective equipment that reduces sound levels must be provided, as well as an effective and ongoing hearing conservation program. The regulation also requires employers to notify employees of the hearing conservation program, and provide hearing testing administered by certified hearing protection professionals at no cost to employees.

Why Earphones are Required
Earphones are required to protect workers from temporary and permanent hearing loss when exposed to continuous high noise levels. Continuous high noise levels in some work environments can’t be altered by modifying equipment or locating employees away from noise-generating sources. In those situations, OSHA requires employers to provide personal protective equipment to protect worker hearing, including earphones. OSHA requires employer to provide earphones for employees whenever the noise can’t be reduced with engineering or administrative controls such as enclosing the noise-making equipment or conditions. When noise exposure is 85 decibels or higher for eight hours — or 90 decibels in the construction industry — employers must implement an effective hearing conservation program that includes proper hearing protection such as earphones.

Earphones and Hearing Conservation Programs
Earphones are just one part of an effective hearing conservation program required by OSHA when noise levels can’t be reduced below OSHA’s required levels. OSHA requires hearing conservation programs to perform noise sampling to identify who is at risk of hearing loss, yearly hearing testing, and hearing protection follow-up for workers with hearing loss. Other OSHA requirements for an effective hearing conservation program include selecting the right earphones to reduce exposure, training workers how to properly use earphones and other hearing protection.

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